From Weather to Whether – Making Climate Central to Strategy

It was Hurricane Helene in October 2024 that shook Spruce Pine, North Carolina, a remote town housing 70% of the world’s high-purity quartz used in chipmaking. What began as a regional storm brought global chip shortages, reminding boards that climate is no longer an external spectacle but a strategic fulcrum for supply chains and competitive positioning.

Traditionally, climate risk was sequestered under corporate social responsibility (CSR). Now, boards are reframing the conversation. It isn’t about doing “good”, it’s a matter of whether your business endures. This shift is no longer optional, it’s existential. Boards are rigorously questioning climate exposure across key assets and dependencies, scrutinising everything from flood-prone manufacturing zones to supplier resilience.

Investor pressure plays a large part here too. Global asset managers and activist non-government organisations (NGOs) have increased legal scrutiny. Shell’s board recently faced a derivative suit in the UK alleging a failure to guard against climate risk. If-then exclusions of stranded assets have moved from activist papers to courtroom evidence. Meanwhile, regulators are zeroing in on greenwashing: KPMG reports a surge in enforcement against vague sustainability claims.

This article goes beyond the “why”, shining a light on how boards are responding, by embedding climate into strategy, finance, governance and continuity planning. Ready to see resilience become boardroom strategy?

Stormproofing the Bottom Line – Disclosures Meet Governance

Boards are increasingly turning to frameworks like the Task Force on Climate Related Financial Disclosures (TCFD)  and the International Sustainability Standards Board (ISSB), not as compliance baggage, but as strategic tools to stress-test their operations. TCFD, established by the Financial Stability Board in 2015, strips away jargon by framing climate risk in dollars and disruption; asking boards to disclose how governance, strategy, risk management and metrics interlink with climate exposure. Meanwhile, ISSB standards (IFRS S1/S2) have taken TCFD’s concepts a step further. They now require clarity on stranded or “legacy” assets and demand that sustainability disclosures be “investor-grade” and comparable globally.

This isn’t greenwash. It’s about embedding climate considerations into enterprise risk management. Risk committees now include flood models and carbon-transition scenarios alongside cyber‑security and FX risk. A standout example is Emirates NBD, whose ISSB-aligned report doesn’t just tick boxes, it has reallocated capital away from fossil-heavy loans and into sustainable lending, citing robust scenario analysis and board oversight.

In essence, these frameworks are transforming annual reports into strategic risk manuals. Boards are now saying: “Show us the financial consequences of a +2 °C world, the phasing out of your coal-fired plant, then demonstrate how you’ll avoid it.” That’s storm‑proofing the bottom line, and it’s becoming non‑negotiable.

The Resilience Imperative – Scenario Planning in the Boardroom

Traditional forecasting once sufficed for boardrooms. Today, with climate volatility rewriting the rules, those linear forecasts feel obsolete. Boards now recognise that relying on past trends is akin to steering by yesterday’s weather. It’s not fit for navigating tomorrow’s storms.

Enter sophisticated scenario planning. Many boards are adopting tools developed by bodies such as the Network for Greening the Financial System (NGFS) and the Intergovernmental Panel on Climate Change (IPCC), integrating long‑ and short‑term climate scenarios into risk assessments. The NGFS’s May 2025 “short‑term scenarios” enable corporations to stress‑test their business models under plausible near‑term shocks, from abrupt energy policy changes to acute physical hazards.

These aren’t dry disclosures. Companies increasingly host cross-functional scenario workshops, bringing risk, finance, operations and sustainability teams together. Participants explore “orderly” vs “hot‑house” futures, debating implications for assets, supply chains and capital commitments.

Some firms are going further, using climate‑twin simulations, digital twins adjusted for climate stressors, to model factory resilience under flood, heatwaves or supply disruption. For instance, the R3GROUP EU project supports manufacturers in building digital twins of their supply‑chain and factory processes, enabling real-time vulnerability analysis and dynamic reconfiguration when disasters strike.

In short, boards are embracing dynamic scenario planning, not as a reporting exercise, but as a core decision-making tool. It’s climate resilience in action. Not just a theory, but a strategic imperative for survival.

Beyond Compliance – Climate as a Strategic Advantage

Boards across industries are increasingly realising that climate action can be a springboard for growth, not just a regulatory hurdle. Take Stockyard Beef in Australia: by securing a sustainability-linked loan with Commonwealth Bank, it tied its interest rate to reducing emissions, resulting in sharper executive focus, cost savings and enhanced export competitiveness. That’s climate strategy delivering bottom-line returns.

Financial innovators aren’t far behind. Morgan Stanley’s 1GT carbon-reduction fund recently backed Insight M, a methane-detecting service provider, yielding both environmental and financial dividends. Likewise, KKR has been channeling growth-infra capital into clean-energy firms like Zenobē Energy, bridging the gap between early-stage climate tech and infrastructure-scale investments.

Boards are also getting savvier with capital deployment. Climate innovation funds are directing investment into climate-resilient startups, while climate-smart Mergers and Acquisitions (M&A) is emerging as a key trend. Datasite revealed that 65% of dealmakers have seen deals collapse due to ESG concerns, proof that climate exposure now shapes acquisition strategy.

Heat Maps and Board Seats – Rethinking Boardroom Capability

Boards are beginning to appreciate that ESG specialists alone aren’t enough. They need directors fluent in climate data, risk modelling, policy shifts and scientific nuance who are capable of challenging assumptions and leading with conviction. More than 50 jurisdictions now expect board members to demonstrate climate competence, underlining its emergence as a fiduciary imperative.

In response, organisations are appointing Chief Resilience Officers (CROs) who report directly to the board, or establishing dedicated climate-risk committees. A recent report by Georgetown’s Climate Center highlights how these roles are being embedded into senior leadership to co-ordinate pre-disaster planning and long-term adaptation efforts.

But it’s not just about titles. Boards are shifting towards a model of dynamic governance, meeting more frequently on climate updates, rapidly adjusting policies in light of new scientific reports or extreme-weather data, and integrating heat‑maps and climate risk dashboards into board papers. They are evolving into agile governance teams that respond swiftly to emergent threats.

The message is clear: boards that fail to embed climate resilience and agility into their leadership structure risk obsolescence. Yet those who step up can shape not just their own futures, but broader economic resilience. The call to action is stark: transform boardrooms now, or be swept away tomorrow.

And what about you…?   

  • In what ways has your board or leadership team discussed or taken action on climate resilience over the past year?
  • What opportunities do you see for your business to innovate or lead in response to climate-related challenges?